Last May Ford Motor Co (F) axed CEO Mark Fields and replaced him with Jim Hackett, then head of its automation group.
Fields had been CEO from 2014 and in that time the automaker's stock declined about 20%.
In October, Hackett presented his vision for the future of Ford. The company he sees will transform itself and be better positioned for a future marked by shifting consumer habits around vehicle purchases and a move toward electric vehicles.
Ford's Executive VP and President of Global Operations Joseph Hinrichs spoke about the company's turnaround efforts on Tuesday at the Goldman Sachs Industrial Conference.
ResetOne of the main topics Hinrichs discussed was Ford resetting its expectations regarding revenue growth.
"Reset is now and how we think about what we need to do today," he explained. Hinrichs noted that Ford cannot continue its current cost-structure if it wants to achieve the margins it aspires to have. Part of this solution is to exit certain assets quickly so that it can refocus its efforts elsewhere, he said.
Predominantly, Hinrichs explained, Ford is resetting revenue expectations based on data in the automotive business. Consequently, the revenue reset is focused mainly on automotive revenue, due to adjusted cost-structuring.
Redesign"Redesign is making us more fit for the future and more competitive," Hinrichs said.
Ford's initiatives in redesigning the company are rooted in taking steps on how to create a more efficient process, foster engineering efficiency, analyze its manufacturing footprint, think about its product programs, and study how they deploy their capital, Hinrichs said.
One example he provided of an area the company needs a better approach is its operations in India. Hinrichs said the company is working to better establish itself within the country with its strategic collaboration with Indian automaker Mahindra Group, which would leverage Ford's global scope and expertise with Mahindra's scale and efficient operating model.
Vehicles SegmentsHinrichs also discussed the outlook for the various segments the automaker is currently engaged in, primarily in North America.
As it pertains to passenger cars, Hinrichs said this remains a valued part of its business, but a segment that recently has not been generating adequate levels of return. As a result, Ford plans on investing less capital in that business.
An example of this he noted was Ford's decision to move Focus production to China, which won't cut much out of the actual cost of making the cars but will save the company money because it won't have to build a new plant.
As it concerns Crossovers and SUVs, Hinrichs said that Ford has seen fascinating growth over the last ten years, but challenges are beginning to arise. On the smaller SUV side, it has become more competitive, and Ford has felt increased pricing pressures. That said, Ford does see opportunities to differentiate within the segment.
Vehicle ConnectivityFord plans for 100% of its new vehicles sold to be "connected" with modems by 2019. Hinrichs explained that this will allow quicker, and more efficient over-air updates.
Also, Ford Smart Mobility is currently working with partners to enhance user experience with that connected capability.
"What can we help you do better in your daily life?" Hinrichs explained.
"I believe very strongly that Ford has a plan that will allow it to be a successful part of the plan to overcome the future challenges of transportation mobility," he said.
Ford will achieve this because it has capabilities and experiences that matter in the business, Hinrichs argued. Among these include, the ability to manufacture at scale, system integration and the ownership of brands that still carry meaning and significance with the consumer.
Shares of Ford were lower over 1% in afternoon trading on Tuesday, and are lower around 1% year-to-date.